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Examining the housing market’s impact on the national and local economy

Published: 07/21/2023
Updated: 12/21/2023

A deeper look into how changes in the housing market impact the economy

by Kristen Stephenson

In April, GPEC launched the Economic Monitor, a comprehensive web tool designed to provide timely, actionable insights into the state of the economy. Through an exploration of key economic indicators, the Economic Monitor offers a concise picture of health at both national and regional levels.

Each month I’m diving into one of the indicators from the Monitor to share in greater detail what the metric measures are, why it matters to the economy and what the current numbers are telling us. This month, I wanted to look at housing.

What does housing measure?

There are multiple ways to measure changes in the housing market, including prices and supply and demand factors. The Economic Monitor tracks the S&P Corelogic Case-Shiller Home Price Index. The Case-Shiller Home Price Index is a measure of U.S. residential real estate prices and a composite of single-family home price indices, calculated monthly using a three-month moving average. An index value of 100 equals the home price in January 2000. The S&P also tracks a 10-City Composite Home Price index and a 20-City Composite Home Price Index, measuring the changes in some of the largest metropolitan areas in the U.S. Greater Phoenix is included in the 20-City Composite Index.

Why does housing matter?

The impact of the housing market permeates throughout the economy. Housing is a key driver in increasing economic mobility, as it tends to be a household’s most valuable asset. However, it is a significant portion of a household’s costs, meaning if housing costs (mortgage, etc.) increase faster than wages, a household will have less disposable income to spend in other areas. Housing weighs heavily in the CPI index we discussed last month and well as the Cost of Living Index, which measures the cost of major consumer expenditures against the national average.

Using the Case-Shiller Home Price Index, which benchmarks the price of a home to January 2000, allows us to compare changes consistently across metropolitan areas even if overall home prices are significantly different.

What do the current numbers say?

The Case-Shiller Home Price index for Greater Phoenix currently sits at 311.36 as of April 2023, a decrease of 6.14% compared to the same time last year. Greater Phoenix’s index peaked in June 2022 at 343.54. The index has ticked up slightly over the last three months after bottoming out at 307.4 in January. Compared to last month, the index is up 0.69%. This indicates the market is back on a positive trajectory, albeit not at the overheated pace we saw this time last year when year-over-year price increases were topping 30%.

The National Home Price Index was 301.05 as of April 2023 (the most recent data available). This is down 0.24% compared to the same time last year and up 1.31% compared to the previous month. The U.S. did not experience the rapid price increase that Greater Phoenix did last year – the U.S. index peaked at 308.32 last June. Increased mortgage interest rates last year had a dampening effect on the housing market in both the U.S. and Greater Phoenix, however this already seems to be leveling out with both markets showing positive growth over the last few months.

Track trends in the Economic Monitor

To see these housing trends mapped alongside 14 other key indicators of health, visit We hope you find the Monitor a valuable tool in understanding the ever-changing economic landscape.

See Economic Monitor